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Big Mac Index: Hryvnia Among the World’s Most Undervalued Currencies

by Roman Cheplyk
Thursday, January 30, 2025
1 MIN
Big Mac Index: Hryvnia Among the World’s Most Undervalued Currencies
Business in Ukraine Economy International affairs Investments

A recent Big Mac Index suggests that the Ukrainian hryvnia is undervalued by 50.7%, indicating an ideal exchange rate of UAH 20.73 per dollar instead of the current UAH 42.0

This finding places the hryvnia sixth on the list of the world’s most undervalued currencies.

Key Findings

  • Big Mac Cost Comparison:
    • In Ukraine: UAH 120
    • In the United States: USD 5.79
  • Result: The disparity implies that Ukraine’s currency is trading at roughly half of its purchasing power parity (PPP) value, according to The Economist.

Global Rankings

Undervalued Currencies (January 2025)

  1. Taiwan (-58.8%)
  2. Indonesia (-56.2%)
  3. India (-54.8%)
  4. Egypt (-53.6%)
  5. South Africa (-52.0%)
  6. Ukraine (-50.7%)

Overvalued Currencies (January 2025)

  1. Swiss franc (+38.0%)
  2. Argentine peso (+20.1%)
  3. Uruguayan peso (+19.3%)
  4. Norwegian krone (+15.3%)
  5. Euro (+2.8%)
  6. Costa Rican colones (+1.9%)

Current Official Exchange Rate

The National Bank of Ukraine set the official hryvnia rate at 41.9294 UAH/USD, indicating a 9-kopeck appreciation. This official figure remains notably higher than the 20.73 UAH/USD valuation suggested by the Big Mac Index, reinforcing the notion that the hryvnia may be significantly undervalued in practical economic terms.

roman-cheplyk
Roman Cheplyk
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